Garman Company Attempts Takeover of British Energy

RWE, a German utility, has attempted to take over British Energy, according to reports. The approach, for £11bn, is valued at almost 700p per share for the UK’s struggling nuclear operator. Further, the offer would value the UK government’s 35% stake in the firm at £4bn.

Racked with mounting costs and plant closures, British Energy has found several suitors and RWE is one of several companies said to be interested in purchasing the company. The company needs financial backing to clean up reactor sites and construct new nuclear power stations. British Energy declined to comment on the reports.

Reports state that RWE made the offer several weeks ago and is now in the process of investigating British Energy’s books. The nuclear operator stated on March 17 that it was in discussions that might lead to a takeover.

Additional newspaper reports state that British Gas parent Centrica has been approached by both RWE and France’s EDF about possible joint bids.

The government has expressed its commitment to production of new nuclear plants as a means to address climate change. However, opposition has arisen over the prospect of the firm ending up in foreign hands, resulting in employment losses in the UK.

British Energy profits decreased 4% for the last nine months of 2007 in contrast with rising costs. Among these was the company’s attempt to minimize environmental impact. The company had to shut down four reactors at the end of 2007 after problems with boiler closure units arose.

www.edfenergy.com